Use of supply relationships to recycle secondary materials

Abstract

Abstract The reverse logistics function in supply chain management has received increasing attention in recent years as the value of the activity, the awareness of its potential and the legal requirements for its presence have increased. Reverse logistics has two dominant end purposes for returned materials–reconditioning (high-value recovery) or recycling (low to no value recovery). Much of the material generated by reverse logistics activity falls into this second category of low to no value. This can create a significant material management problem for many organisations. Several large organisations have successfully created recycling empires around the more primary materials that feed readily into raw material supply streams–such as metals, timbers and paper. For individual firms, however, the likelihood of investing effort in identifying both materials that could be recycled and a potential market for them has seemed frequently out of reach. This study highlights an under-researched phenomenon whereby firms engage with one another to seek economical recycling of low value and often complex secondary materials. Using eight case studies of manufacturing firms, the study identifies several examples of innovative and valuable recycling solutions occurring between supply chain members. Supply relationships are proposed to provide a critical enabler for improving firm knowledge of material value, recycling options, previously un-considered buyers or markets for a material, and for aggregating resources and improving the economy of recycling. Keywords: supply chain managementsustainabilityenvironmental managementoperations management